Money on my mind: Being the boss of your bank account

Being an adult requires some pretty smart moderation when it comes to money. Intimidating as it may be, investing in a fund can prove to be more rewarding than it seems. Illustration by JL JAVIER

Manila (CNN Philippines Life) — Here’s a sobering reality check: one cannot live on French fries alone. While the thought of stuffing one’s face with a tub of cheese-flavored fries on a regular basis sounds like bliss, it isn’t exactly an ideal way to care for your health or treat your wallet. Imagine your hard-earned salary — the one you spent weeks and months earning — being wiped out in a few short minutes. Not quite so appetizing.

This isn’t to say that you should deprive yourself of life’s simple pleasures; the boon and bane of adulthood involves some pretty smart moderation. Setting money aside from your income each month is an important habit-forming practice. Just 10-percent of a P25,000 salary could mean having extra money in the thousands later on. And whether your goals range from the immediate to the far-off future, investing in a fund is the best way to maximize your money.

Now, the thought of investment rightfully sounds terrifying. Even more intimidating is knowing that there are a ton of ways to do it: from investing in the stock market, purchasing government securities, or putting it in a fund. At times like this, trusting an expert to manage your money ensures that you get the most out of your hard-earned savings.

The key to smart investment is also knowing the kind of risk you can take: are you a conservative, moderate, or aggressive investor?

Consider Security Bank’s (SB) Unit Investment Trust Fund (UITF). When putting your money in the UITF, you entrust it to Security Bank’s team of financial professionals. These experts will pool your funds with that of other investors to choose savvy investment outlets that may provide the best returns. These funds offer higher rates than bank deposits, and offer a ton of options for every kind of investor. At just P10,000 (for peso-denominated UITFs) or USD1,000 (for dollar-denominated UITFs), it’ll be easy to get started.

When you finally decide to put some money into the UITF, consider a few things first. Your lifestyle, for one, plays a huge role. Do you still live with your parents or are you living alone? Do you have any pressing financial needs (school, groceries, bills) or are you mostly solvent? This dictates how much money you can put aside, because a trust fund is ideally something you can’t touch on a short term basis. Why? Because the market tends to fluctuate, and your P10,000 could be valued at P8,000 on a bad day. But that doesn’t mean its value won’t increase when market conditions improve.

Now, the thought of investment rightfully sounds terrifying. At times like this, trusting an expert to manage your money ensures that you get the most out of your hard-earned savings. Illustration by JL JAVIER

The thought of your money losing some value may have gotten your gut flipping. The key to smart investment is also knowing the kind of risk you can take: are you a conservative, moderate, or aggressive investor? When you start a UITF fund with Security Bank, they’ll provide you with a questionnaire to determine your risk profile to help them recommend the right investment for you. You can check it out here.

A conservative investor, for example, would be recommended to get the SB Money Market Fund, which invests in bank deposits and with the Bangko Sentral ng Pilipinas. (Pro tip: anything invested in government securities are typically low-risk.) On the other hand, a moderate investor would be advised to get an investment like the SB Peso Bond Fund, while an aggressive investor (one who won’t need the money for awhile) should likely get the SB Peso Equity Fund. These are invested in different securities and even the Philippine stock exchange. It may have higher risk of capital loss in the short term because of volatility in the markets your money is invested in. On the upside, because of the higher risk, you’d most likely get higher yields in the long run.

Security Bank’s team of financial experts all agree that to lessen risk is to diversify — don’t put your eggs in one basket. Once you’re able to discover the kind of investor you are, it’s best to do more research on other financial products that’ll suit your risk appetite. As for your existing funds, don’t just limit it to the principal amount you put in. In increments of P5,000, you can keep adding to your UITF so that your fund will keep on growing. So when’s the best time to start? Now more than ever. Your money is projected to grow through time by investing in the UITF. Who knows? You might even have some extra cash for the occasional cheese-flavored fries.

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Want to learn more or start investing? Visit Security Bank’s UITF page at www.securitybank.com/uitf or email their team of financial experts at trustmarketing@securitybank.com.ph.